How do you retire early without a guilty conscience?

[shelnut]

In 8 months I turn 50 and eligible to retire (FERS firefighter). INTJ personality type, the youngest of 4 siblings and the first one to retire. My pension will equal my sister’s fulltime income and about 80% of brother’s income. They think I am crazy to give up a well-paying, secure job. Half-jokingly referring to me as lazy, cheating the system and getting away with something I don’t deserve. Co-workers (many living paycheck to paycheck) don’t want to hear how I intentionally lived well below my means to ensure I could retire early.

In addition to the guilty conscience, I’m fretting over not I have enough money after retiring, which seems silly. If I never work again and my investments matched the inflation rate, I should have $45,000/year net until I’m 90 yrs old. That’s $13,000/year more than what I am living on now. In 2008 I took a 4 year sabbatical (aka post-divorce, mid-life crisis, shortly after securing my 20 years as a firefighter), with no pension, small savings, no health insurance and no guarantee of any PT income. I managed just fine on $30,000/year PT income. Now I am expecting a pension that guarantees I can maintain my current spending in addition to a healthy nest egg and that same PT income potential and yet I’m worried about money. What the heck happened to me?

The Numbers:
· Personal: Single (divorced in 2006 and no, he does not qualify to get any of my pension), no kids, one awesome dog, painfully frugal, fit and healthy.
· Salary: $76,000 + $20,000 OT. Twice my needs.
· Current expenses: $32,000/yr, $2650/mo (based on 6 years of religious tracking)
· Debt: Zilch, zippo.
· Savings: $120,000 cash, $300,000 IRA/401K (mutual & L funds). Yes, I should have more, but I am playing catch up after the divorce.
· FERS Pension: $40,500 gross, $32,500 net after St/Fed tax and health ins. Includes COLAs.
· PT Income potential: $20,000-30,000/year for 6 years.
· Housing: I rent a 2 BR house w/ garage on 5 acres for $800/mo. Utilities inc.

Retirement plan:
· Travel more. Road trips to visit family/friends, camping/hiking, exploring. I don’t anticipate a significant increase in my expenses, except for car/moto gas & maint and 2-3 month cheap vaca rental.
· A couple of months each winter in Mexico or other warm locale, camping or short-term rentals, as I did during my work sabbatical.
· April thru October in current location to facilitate PT work which could be more that planned due to established work connections.
· Keep renting, I know it seems silly to pay rent for a house I’m not using year around, but it’s a great situation that would be hard to duplicate for the price. And I don’t want to live out of a storage unit or a suitcase.
· Initially, pull $6,500/yr. from savings to supplement pension for a total of $39,000/yr, $3250/mo. for $600/mo more than current.
· Save PT income until reaching a cash total of $150,000+, likely to occur after 2-3 years. After that enjoy the rest of the income (or more likely, keep saving since I find it hard to spend money indiscriminately).
· After age 56, consider using savings to buy a small place/condo where I can settle into full retirement. Or not.

Make sense?? See any wholes in my logic? Muchas gracias.

 

[petershk]

Seems like you thought it through well. Personally I'd secure ownership of something first... But that's debatable. If for no other reason SUPER low borrowing rate that is unlikely to get lower.

As for guilt. Dunno what to say... You haven't done anything they couldn't have. My own situation is far more lucky than yours... You earned it. Stick around here and maybe find additional friends . People think you're dumb to live in a cheaper apartment and drive a crappy car till you can retire a decade or two before them... If they are jealous afterwards... Whose problem is that yours or theirs?

What's the value of a well paying job if you'd rather do other things and don't need the money? I haven't seen a job that offers you to earn more time to your life. One 'job' pays you only money... The other let's you pick which you want... I like the FIRE job better...


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[papadad111]

Congratulations. No guilt. You earned it just like them and you just chose to spend it differently.

You can't buy time ! Rock on !

 

[kramer]

Nice post and welcome to the forum, shelnut!

Just a few questions that might help folks address your situation in more detail:

* Are you eligible for social security and do you know about how much you will get per month at full retirement age?

* Will maintaining and securing your 5 acre rented property while you are away for months at a time be difficult or costly?

* About how much do you think the condo that you mentioned buying in few years will cost where you want to live?

 

[Rothman]

Congratulations shelnut on achieving your FI and a point where you can choose ER. The key point is you worked and saved, so no there should be no guilt if you choose ER. However I know what you mean by guilt of ER in that you are able to keep contributing to society, and it feels "lazy" not to keep working. I'd suggest maybe you look at volunteer opportunities or other ways to contribute when you stop working.


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[poorcarver]

Nice job. For what it is worth, the DW's relatives were on our A*S forever about our frugal ways, small car, small home, small property taxes, modest vacations, cook at home vs. restaurants, etc. Claimed we had a duty to spend to be part of the economy. Fast forward to now and while I was by no means an ER, still we are retired. They all still work and now we are "gaming the system". No rest for the weary I guess.

 

[travelover]

Welcome. I think that one of the first rites of passage of becoming financially independent is to quit caring what other people think, to the extent that it makes you feel bad about yourself.

You earned it, now embrace it.

 

[utrecht]

I seriously doubt that my friends felt guilty buying brand new cars every other year while we drove our cars for 10+ years. I doubt that they felt guilty buying a bigger better house every 4 years while we lived in the same house we bought 22 years ago. So I don't feel guilty now that we are retired at 50 and 45 and living the good life.

 

[petershk]

Nice job. For what it is worth, the DW's relatives were on our A*S forever about our frugal ways, small car, small home, small property taxes, modest vacations, cook at home vs. restaurants, etc. Claimed we had a duty to spend to be part of the economy. Fast forward to now and while I was by no means an ER, still we are retired. They all still work and now we are "gaming the system". No rest for the weary I guess.

I've heard that story... Spend and be in permanent debt because it's good for the economy.

Make zero sense.

If everyone lived within their means the country would be bursting with a surplus of free people generating wealth doing what they love instead of a debtor nation slaving at jobs they hate to buy craps they don't need... And passing that on to their kids.

Sorry... Feel kinda strongly about it .

I'm generally pretty open minded but in this case you are right... They are wrong. Enjoy it! Just tell them "it's America and we are free to live and believe how we want I respect your life choices... I hope you respect mine " (on the inside the difference is you don't have to care and if others agree or not... And that is priceless


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[marko]

Welcome. I think that one of the first rites of passage of becoming financially independent is to quit caring what other people think

One of the more liberating life changes for me!!

I seriously doubt that my friends felt guilty buying brand new cars every other year while we drove our cars for 10+ years. I doubt that they felt guilty buying a bigger better house every 4 years while we lived in the same house we bought 22 years ago. So I don't feel guilty now that we are retired at 50 and 45 and living the good life.

......and your friends will be working until the day they die.

 

[athena53]

Congratulations! I agree with Utrecht: others didn't feel guilty while they lived fancier lives than you; you shouldn't feel guilty for reaping the rewards of your choice to live modestly. I think all of us face the same panic about actually pulling the plug and living off savings; I've got a lot more saved than you do (but with less potential pension) and now, after a year and very good market results, I'm starting to get more comfortable with the idea of actually spending what we saved.


You haven't mentioned insurance; will you have retiree health coverage? That's huge, especially if you have the old-fashioned plan with low copays instead of an HDHP. If the municipality starts running into financial problems, they may switch to a less-generous plan or start charging higher premiums, so you need to be prepared for that.


I like the idea of eventually buying property; with your long-term view you can wait for another drop in values (yeah, it will happen, especially if interest rates rise).


And don't feel guilty at all. You earned this!

 

[pb4uski]

Looks to me like you are good to go and enjoy life. I suspect that your taxes will be much lower than what you project. You can do a pro forma return assuming you have retired using TurboTax or TaxCaster to verify. I'm getting ~$4k federal plus state if applicable, but much less than the $8k in your post unless the difference is state income taxes and health insurance deductions.

 

[mystang52]

I don't feel guilty, but whenever ER comes up in discussion, I always say something to the effect that "I've been fortunate." This tends to shortcut any detailed discussion, including statements of envy or bitterness from the other person.

 

[ggbutcher]

I've got a tool I wrote for plotting income/distributions/expenses, so I put your numbers in. I used a 3% inflation rate, current expenses assumed through your lifetime, distributions out to age 100. From that:

1. You maintain income-expense parity until 59 1/2, when you can start drawing from the IRA without penalty.

2. Then, if you get at least 5% on all of your savings, your income doesn't approach your expenses until you're well into your 90s. Now, your expense patterns will change through that time, but you can think of it as replacing one kind of expense (travel, hobbies) with another (medical, LTC)

3. One potentially significant expense you didn't relate here was your medical situation. That'll have a really big impact on your decisions prior to Medicare/Medicaid, and how you intend to insure yourself when the aches and pains start kicking in.

I made some conservative assumptions in my data entry, so your mileage may vary there. However, I'd really encourage you to give some thought to your medical situation, make sure you're covering the contingencies at least with some consideration...

 

[6miths]

You've done a great job and life's too short to feel guilty about retiring. The good news for you is that certain professions are almost expected to retire at a relatively early age - fire and police to name two. Try retiring from a profession that is expected to work until 70 and see how it goes. When I announced to my accountant (a true lifelong friend) that I was retiring, one of the first things out of his mouth was 'Don't you feel badly....?'. He said 'just kidding' of course but the sentiment was there. There is no law that says that you have to stay with a job that has or is going to affect you health. Most of the world looks at the North American 'work ethic' and shakes their head.

 

[razztazz]

I want to know why the rest of The World doesn't feel guilty about forcing people to work in the first place? Feeling guilty is for those who have done something wrong, not for those who have done something right.

 

[ArkTinkerer]

Guilt? Planning on pulling the plug this year and all I have to do is think about crawling under a house and/or fixing the sewer on one of the rentals to remove any such feelings. As a firefighter I would imagine you were doing things they wouldn't think of doing. You managed your funds well and EARNED early retirement. Never let them tell you any different. Congratulations!

 

[Dog]

Congrats Shelnut....good for you. I retired last August and am truly loving it. I never made a secret of my goal, but I still get the "must be nice" from one of my sisters and several friends. I just respond with, "it's really nice - I highly recommend it". I thought I would feel guilty, but I don't. I earned my retirement and so have you.

Your low expenses, good pension and healthcare you mentioned look promising. Best wishes on your decision.


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[photoguy]

For most of my life I was pressured by family to do well academically and in my career. Becoming an MD was the preferred profession but instead I went into engineering and then Ph.D in CS (which was acceptable but not optimal). Work wasn't much better due to the up-or-out mentality.

At some point you just get tired of dealing with the expectations of others and you say to hell with it and do whatever you want.

 

[David1961]

It may be the real issue is your siblings' jealousy, and not your guilt.

 

[Lakewood90712]

Guilt ? you can scratch that of the list.

If you still enjoy the job , keep at it a couple more years and build a larger nest egg ( first time I have suggested "one more year"to anyone ). Things and life can cost more than planned , and nobody knows what inflation will be like for the next 30 or so years you will likely live. The miracle of compounding applies to inflation too.

I retired from Local gov. at 55 , only 12 years service. Small pension. Left only because I began to hate the job , and needed time to do eldercare.

If you can find PT work post retirement , that pays decent , that's a good plan IMO.

Things don't always work out per plan.

Welcome to ER.

 

[Midpack]

I assume the OP might be hoping for some talking points to defend himself, but that's just feel good stuff - it's unlikely anyone will change their views. So it really doesn't help much, except maybe for a moment.

No one can make you feel guilty, only you can do that. Others can't make you happy, sad, or anything else - but it's a lesson that takes time to grasp and learn.

 

[Taxman59]

I too am the youngest of 4 children (and the only boy which adds to the pressure). I understand the "guilt" issue. I am retiring July 1 of this year. When I told my sisters and mother, they were shocked and surprised. They assumed I was going to work for someone else after 22 years at my current employer. Since I told them, the oldest decided to retire, the youngest decided to stay out of the j*b market (she was laid off and has been taking time off to care for our mother) and my middle sister has been semi retired for several years. I was expected to work for 5-10 more years. I don't think that I actually felt guilty, but I felt bad about leaving a good income while my youngest sister couldn't find a j*b at all.

Enjoy the fruits of your own labors.


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[shelnut]

Wow, thanks to all of you for your positive feedback, this is definitely the place to get some incredible support for ER. Here are the answers to the questions some raised:
· I am retiring from the feds (forest service).
· Social Security: My FERS pension includes $29,800 annuity & $10,700 SS supplemental, which ends at age 62. I can choose to start SS then ($1660/mo) or delay to get more $ later.
· Health Insurance: Regaining long term health ins coverage was the main reason I came back to the feds. My cost is $135/mo. and it will remain the same after I retire.
· Housing situation: Rent vs Buy is a debate that has plagued me for my entire career. I’ve owned 6 homes and each time I spent all my spare time and money on maintaining/remodeling, just to sell in less than 5 years, thus barely breaking even financially. Being single with modest needs and no idea where I want to settle down or if I even want to settle down, I feel it just makes more since to rent. I know interest rates may go up, but buying a house is a huge financial commitment I don’t want to rush in when I am not ready. If and when I buy, I’m targeting AZ since it is close to family and MX and no snow. My budget will depend on my savings, but likely $150,000-200,000.
· Why rent year-round when I am traveling for most of the winter? Good point. While on sabbatical I tested going without a US home for 3 years. I had a fulltime rental in MX at a whopping $200/mo, and stayed with family and friends in the US 8 mo/year. Being highly introverted, it didn’t take long before I started to feel like I was going crazy, I never really felt ‘at home’. Plus moving all the time was a real hassle and spendy. I am willing to pay an extra $3000/year to know I have a nice place that I can return to whenever I need some cave time.

Thanks again and I am looking forward to joining you all on the other forums.

 

[Choices]

You are in a good spot. I agree that renting is the best till you decide where you want to be(at our house we always add, when we grow up).
Folks who deride you for leaving fire fighting at such a tender age do not understand what a physical, hard, dirty and dangerous job it is. It is not for the faint of heart.
Just keep an eye on your bottom line and savings. Keep up with what's going on with SS, right now, the conventional wisdom is for single folk to claim at 62, that may change but you have years to figure that out.
You have earned your retirement so enjoy it. No apologies!